Reinsurers were asked if they would be willing and able to back extensions of such coverage as requested by corporate insurance buyers all over the world. The response from the reinsurance industry, notably Munich Re and Hannover Re, was that this would be unlikely without significant price increases and far more information about the underlying risks provided by insurers and their corporate customers.

“For the first time last month I attended the Monte Carlo Rendez-Vous where the reinsurance industry come together. I saw that they were completing deals without really understanding what the original client expects and fully understanding the exposures. At the same time they are complaining about the lack of information that we provide. I would like to see the insurance and reinsurance industry open up and by doing so we can look at the issues together, we need to do this together and open up solutions,” urged Mr Den Dekker.

Mr Den Dekker also said that he would like to see the market concentrate more on coverage and capacity rather than price, a topic that he strongly emphasised during the main debate in Monte Carlo in which he took part along with market leaders such as Torsten Jeworrek, Head of Reinsurance at Muich Re, Mike McGavick, CEO of XL, Grahame Chilton, Deputy Chairman of Aon and hosted by CRE Editor Adrian Ladbury.

“During the debate and at the event generally a lot of people were talking about price, will it be softer or harder and what impact will the catastrophes have. They do this because they want to talk the market up. But if I sell a product it has a price. I won’t sell it at a loss. The insurers need to get their act together on this point. And with Solvency II they will look to get price hikes as in 2002. But price is not the most important thing for members. It is important but not that important. We are looking for solutions and capacity. This is the most important thing for us,” said Mr Den Dekker.

Mr Den Dekker said that the events in Japan, New Zealand and elsewhere are very serious catastrophes affecting millions of lives and have shown that business has become so complex that ‘even risk managers’ no longer have complete control of the complex supply chain. “It is so complex but we need to keep up with what is going on in the world,” he told the massed delegates.

Mr Den Dekker said reinsurers needed to understand how business models had changed rather than just focus on price so that they could help insurers devise innovative solutions to risks that companies face now and will face in future.

But the Ferma president also said that risk managers could do more to make insurers and reinsurers comfortable with the risks that they want to have underwritten. “The reinsurers complain about complex business models and a lack of information, so we need to learn more about their businesses, their processes, how they use their models and what information they want from us,” he said.

Mr Den Dekker also used his opening address to review key progress made by Ferma since he took the helm at the Prague Forum two years ago. This included the recent initiative to find greater consistency on the interpretation of insurance and tax laws on global programmes, lobbying work on Solvency II in partnership with ECIROA and the work carried out on corporate governance around the 8th EU Company Law Directive.

The outgoing Ferma President, who is replaced by Jorge Luzzi of Pirelli at the end of the Forum, said that he would continue to play a role in the global programmes effort that is being managed in partnership with Airmic and the London & International Insurance Brokers’ Association (LIIBA) this is ‘making progress’ after the second formal meeting took place towards the end of last month in London, he reported.

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